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Jordan’s resilience recognised: Moody’s upgrades credit rating after 21 years

May 18,2024 - Last updated at May 18,2024

Jordan has achieved a noteworthy milestone in its financial history with a credit rating upgrade from Moody’s, which stands as a testament to its resilience and sound economic policies. Jordan’s capacity to steadfastly and prudently maneuver through regional and global problems is highlighted by the agency’s decision to upgrade the country’s long-term sovereign credit rating from B1 to Ba3, with a stable outlook.

Jordan’s credit rating has been upgraded for the first time in twenty-one years as a consequence of coordinated efforts in macroeconomic policy, public financial management and successful risk mitigation techniques. The rating increase was ascribed by Moody’s to Jordan’s success in fortifying its resistance against external shocks, a remarkable achievement considering the unstable geopolitical conditions prevalent in the Middle East and beyond.

Jordan’s proactive response to numerous obstacles, including the COVID-19 epidemic, variations in global oil and food prices, and the armed war between Russia and Ukraine, is one of the main elements leading to this positive rating. Jordan has proven resilient and adaptable in the face of adversity because of its aggressive policies and careful economic management.

Finance Minister Mohammad Al Ississ, rightly praised this accomplishment. He sees it as validation of the extensive structural changes the administration has carried out. These are the reforms that have gained international recognition and cleared the path for continued growth, with the goal of protecting the middle class against shocks both domestically and abroad.

Jordan’s robust fiscal and monetary policies, together with its ability to secure both domestic and foreign funding, were highly praised by Moody’s. The agency especially praised Jordan’s dedication to significant structural changes, such as the adoption of a new investment law meant to enhance the business climate and offer stability to investors. Regarding governmental finances, Moody’s stated that it is optimistic about Jordan’s fiscal indicators remaining stable in the upcoming years. Forecasts show a declining government debt to GDP ratio and a contracting budget deficit, indicating sustainability and fiscal discipline.

The Central Bank of Jordan’s Governor Adel Sharkas highlighted that Moody’s assessment of Jordan’s economy demonstrated its resilience and capacity to bear shocks. He emphasised the responsibility of the central bank in upholding financial and monetary stability, guaranteeing steady rates of inflation, and establishing a fixed exchange rate between the US dollar and the Jordanian dinar.

This improved credit rating reaffirms Jordan’s standing as a trustworthy partner for foreign investors and shows that the country can overcome obstacles to grow stronger. This accomplishment strengthens Jordan’s standing on the international scene and is consistent with its larger economic agenda of modernisation and prosperity.

Furthermore, Jordan’s dedication to reform and sustainable growth is demonstrated by the successful conclusion of the first review of the financial and economic reform programme with the International Monetary Fund. It reaffirms Jordan’s standing as a trustworthy partner for foreign investors and shows that the country can overcome obstacles to grow stronger.

Building on Jordan’s successful track record, further research is needed to identify the specific programmes and laws that contributed to this remarkable achievement. Jordan’s economic policy has been noteworthy for emphasising innovation and diversification. Aware of the need to boost competitiveness and lessen reliance on established industries, the government has aggressively supported programmes to encourage entrepreneurship, draw in foreign capital and advance cutting-edge sectors like technology and renewable energy. In addition to opening up new growth opportunities, these initiatives have established Jordan as the region’s centre of innovation.

Jordan’s economic policies have been motivated by its dedication to inclusive development. The government has targeted social welfare, healthcare and education to ensure that the benefits of economic expansion are shared fairly throughout society. By emphasising inclusivity, the nation’s human capital is strengthened and social cohesiveness is promoted, establishing the groundwork for long-term sustainable development.

The participation and diplomacy Jordan has displayed in the area are another important component of its success. Despite Jordan’s location in the centre of geopolitical tensions and conflicts, it has adopted a practical foreign policy meant to foster regional cooperation and stability. Through the promotion of communication and cooperation with international partners and neighbouring nations, Jordan has successfully reduced the negative ripple effects of regional crises and created avenues for economic integration and cooperation.

Jordan’s commitment to environmental sustainability deserves recognition in the context of its economic resilience. As climate change poses increasingly severe challenges to global economies, Jordan has proactively invested in renewable energy projects, water conservation measures, and sustainable urban development initiatives. These efforts not only mitigate environmental risks but also create new economic opportunities and enhance the country’s attractiveness to environmentally conscious investors.

Apart from these internal endeavors, Jordan has profited from its advantageous position and accessibility. Jordan acts as a gateway for trade and investment between Asia, Africa, and Europe due to its location at their intersection. Through investments in trade facilitation, logistics, and infrastructure development, Jordan has capitalised on its advantageous geographic location to broaden its economic horizons and augment its competitiveness within international markets.

Looking ahead, Jordan will need to maintain its commitment to inclusive development, innovation, and reform to achieve long-term economic growth. With its recent credit rating upgrade, Jordan is well-positioned to take advantage of the newfound chances for progress and prosperity for its people by building on its strengths and tackling its remaining issues.

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